Published: Sun, August 12, 2018
Worldwide | By Jermaine Blake

Trump OKs stiffer tariffs on Turkish metals as lira plummets

Trump OKs stiffer tariffs on Turkish metals as lira plummets

President Tayyip Erdogan has told Turks to sell their gold and US dollars to support the country's currency which plunged after US President Donald Trump escalated a feud with North Atlantic Treaty Organisation ally Turkey by doubling tariffs on metals imports.

According to Turkey's Daily Sabah English website, the Turkish president made the remarks while addressing the ruling Justice and Developemnt Party (AK Party) members in the Black Sea province of Rize.

The two governments have been at odds over a wide range of topics - from diverging interests in Syria, to Turkey's ambition to buy Russian defence systems, and the case of evangelical pastor Andrew Brunson, who is on trial in Turkey on terrorism charges.

He appeared to blame foreigners for trying to hurt Turkey, saying: "This will be my people's response against those waging an economic war against us".

With the currency diving, Trump authorized higher tariffs on Turkish imports on aluminum and steel of 20% and 50% respectively. While many of Turkey's challenges are specific to that country, there are certain characteristics - a heavy debt load following a prolonged, low USA interest-rate driven borrowing binge in dollars - broadly shared throughout emerging markets.

Erdogan said Turkey is not afraid of outside "threats".

"They say we will not give this or that".

While Turkey's economy is only the 17th largest in the world, there are a number of concerns that Trump's latest trade war is only further disrupting global commerce, damaging longtime alliances, and threatening global economic growth. Operations in emerging markets can lose significant value as the United States dollar strengthens, as it did Friday.

Ankara's rocky relations with Washington took a further hit as President Donald Trump lobbed fresh salvoes via Twitter against Turkey, plunging the sagging Turkish lira to new lows against the dollar. I am calling on those in America again.

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A delegation of Turkish officials held discussions with their counterparts in Washington this week but there was no sign of a breakthrough. "Don't heed them. Don't forget, if they have their dollars, we have our people, our God", Erdogan said.

The reaction from global currency markets caused the euro to slump to a 13-month low and pushed the dollar to a one-year high.

This year, it lost more than 40 per cent.

The news comes as Erdogan warned the U.S. that Turkey will seek "new friends and allies" in an editorial published in the New York Times today, urging them to respect Turkish sovereignty "before it's too late".

He added: "Unless the United States starts respecting Turkey's sovereignty and proves that it understands the dangers that our nation faces, our partnership could be in jeopardy".

Trump intensified the alarm on financial markets with his new tweet doubling the tariffs, noting for good measure the lira was sliding "rapidly downward against our very strong Dollar!".

Iran has also suffered from a major tumbling of its currency this year partly over reimposition of U.S. sanctions after Trump abandoned a 2015 nuclear deal.

On Friday Turkey made it clear Mr Erdogan had spoken on the phone with Russian President Vladimir Putin after the latest U.S. tariffs, with the two men "expressing pleasure" that relations were progressing "positively". But such hopes looked forlorn in the wake of the populist Erdogan's latest volley of hot rhetoric unleashed at actors in the West whom the president accuses of having brought Turkey to the brink.

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